Resources and the regime of their use

The next confusion noted by Ostrom (1999) is between a common pool resource (which might be a company or common grazing area) and a common property regime. Here, the duality of property rights comes into sight: a common pool resource is a thing, while a common property regime is an example of the relationship between persons in regard to things. As for a common pool resource, one person’s consumption subtracts from the quantity available to others; it is a variant of collective ownership in which the exclusion of a beneficiary might be prohibitively costly. I would like to remind the reader that not all variants of collective ownership are exposed to

10 _{The teamwork in a company is an example of collective use of resources; in the case of teamwork}

overuse (Ostrom et al 1999); if this is the case, the fact that socialist property was a form of collective ownership wasn’t a necessary reason for its overuse.

A common property regime is to be explained in regard to the distinction between public and private property. The property regime regulates the use of resources, regardless of whether they are in individual or collective use. Rose emphasises that “a private property regime holds together only on the basis of common beliefs and understandings” (Rose 1994, p. 5). They in fact embody a common property regime. It is a common belief that the restriction of having wild animals on a property in a residential area doesn’t imply the taking away of property, though the community in this case restrict to some degree private ownership. Those who advocate private property count on some common understandings as well; behind insisting that private property is more efficient than collective property lies the assumption that a more efficient regime is a priority. If private property in the form of self-management (if self-management is considered private property) is not sufficiently efficient it may be replaced by an alternate regime, for instance by majority ownership of the firm. In this case the privatisation of socialist property wasn’t a transfer of public property into private hands but it was a transformation of property regime: one property regime which was based on private property was transformed into another one, which was based also on private property, but of another kind.

Ostrom (1999, p. 334) agrees with Rose that the private use of resources is regulated by a kind of ‘commons’: common beliefs impose restrictions on the private use of property. Transformed into law, common beliefs and understandings may become the rules that - for instance - regulate the financial system; a common

property regime regulates the use and transfer of private property. It implies the

existence of a right that belongs to a community (society), which is superior to the individual right of use of resource. Looking from a broader perspective, common beliefs that regulate private property represent a collective ownership of a wider common pool (nature, for example, or a total national wealth) that is divided in individual property.

It seems that the distinction between public and private property might not be taken for granted and as unproblematic; the question of which component of a property rights bundle makes someone an owner may also not be clear. Then the questions are: what was privatisation and what was the process of transition from socialism? Since resources in Slovenia and Croatia before the transformation of the property regime were managed and used collectively, while individuals enjoyed

particular property rights, the question of privatisation was: which further rights were to be transferred to individuals and which regime was to regulate individual rights? Under socialism, income from a common pool was allocated to certain individuals; they also had the right to use a certain resource. What right was to be transferred from a common pool to make an individual an owner and transform socialism into capitalism? Chapter V, which describes the debate about the transformation of self-management and social ownership, and further chapters (V to VIII) that describe the real process, show how important for the process of privatisation different conceptions (understandings) of private, collective and public property were.

The distinction between common pool and common regime relates to the old discussion of whether private property emerged by allocation of particular rights over a common pool resource to individuals and what was left was under common (public) rule; or if collective property was formed by individuals giving up their natural rights. Hobbes and Bentham advocated that private property is a creation of the sovereign state, so they might be considered advocates of the former view. Since a number of authors emphasised that a socialist state before privatisation was in a position to abandon its ownership for another’s benefit (Bicanic & Skreb 1992), the privatisation of socialist property might be understood as an echo of Hobbes’s and Bentham’s scenario. For Locke, private property was an individual natural right, which belongs to an individual regardless of the community; though the principles on which the Lockean right to property rely could be understood as a common regime, a system of common beliefs, and understandings, which enables a creation of private property.11 _{I claim that privatisation in Croatia shares}

particular characteristics with a Lockean initial appropriation. The principles of the emergence of private property in Locke will be presented in the next section.